are they only for the rich?

Electric cars remain at very high prices and often out of reach for households. A meeting that could last in Europe.

This is a question that can cause controversy, are electric cars only meant for the wealthiest households? With prices sometimes double that of thermal engines, electric cars remain, for a large proportion of motorists, luxury products. A finding that the managing directors of the European manufacturers do not exclude, who undertake their elitist pricing policy on electric motors. But when will the electric car become so cheap in Europe?

Electric cars, manufacturers take on their prices and condemn inconsistent policy decisions

When studying the different prices of electric cars in Europe, it is impossible not to shy away from the prices applied by the various European manufacturers. With similar finishes, an electric motor is in many cases 6,000 to 10,000 euros more expensive than a thermal version. A finding that the producers do not deny. Better, they assume it. Thus in their joint interview last Sunday, given to our colleagues from ParisianCarlos Tavares and Luca De Meo, assume the elitist prices of their electric models.

Renault CEO Luca de Meo says: “We are still in a phase of technological breakthrough, where new products are by definition expensive. Today, privileged people who have the means, a garage and a terminal at home can afford an electric vehicle. It is politically incorrect to say it like that, but it is the truth’.. The same observation for Carlos Tavares, CEO of Stellantis, which evokes “a problem of social stability” due to the prices of electric vehicles.

Words that leave no doubt, electric cars will continue to be expensive in the coming years or even the next decade. If Luca de Meo assures that manufacturers “will succeed in democratizing the electric car”, the fact is that European manufacturers are not rushing to lower prices.

However, the electric car is becoming more and more democratic. As proof, sales of electrified vehicles hit a new record this year in France, with a market share exceeding the symbolic 20% bar. So why are electric cars so expensive? Quite simply because manufacturers have had little taste for the decisions made by European states to ban heat engines.

Many believe that they have been betrayed or ignored by the public authorities. Car brands are therefore forced to produce electricity despite the colossal investments it entails.

Therefore, prices will continue to be so high in the coming years. The manufacturers pass on their expensive investments regarding the transition to electricity on the prices of the various models. It is up to the states to take on the social discontent with these tariffs. Carlos Tavares thus still regrets in the interview to our colleagues from Le Parisien that the politicians have taken “the subject on its head, leaving aside the issue of energy and the infrastructure”. Carlos Tavares also indicated it at the beginning of the year “electricity was the energy chosen by the politicians, not by the manufacturers”.

ACEA already warned about the price of electric cars in 2019

As a result, manufacturers do not want to lower prices enough to make the electric car unavailable for a long time. However, the topic is not new. Already in 2019, ACEA (Association of European Automobile Manufacturers) showed in a study the correlation between the electrification of vehicles and GNI per inhabitant. It was thus noted that the richest countries in Europe were those where the manufacturers sold the most electric cars.

Norway, Sweden, Holland or even Germany. Conversely, the less wealthy European countries were the ones where electric cars sold the least. The study carried out in 2019 showed that a Renault Zoé was twice as expensive as a Renault Clio.

Three years later, the situation has not changed. It even got worse. Because Covid has been there, and above all, Europe is experiencing inflation, which is having a serious impact on household purchasing power. The difference between the price of electric cars and households has therefore become even greater. It is estimated today that the typical buyer of an electric car is someone who lives in the city, class CSP+ and drives less than 10,000 kilometers per year. If these criteria are refined every year, the electric car is nevertheless intended for the manufacturers’ wealthy customers.

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Will salvation come from Asian manufacturers?

So is the electric car destined to remain a vehicle for the rich? Not necessarily. The latest breakthrough for Asian manufacturers in Europe thus changes the cards. These producers, often subsidized by their states, offer competitive prices. If prices remain high, the level of finish and equipment on offer makes it possible to offer a very complete product. Most of these manufacturers have extensive experience with electric motors.

This spectacular breakthrough in the European market can thus force the hand of other manufacturers to lower prices. The big brands in Europe also expect a bitter commercial battle in the coming months.

Another source of satisfaction for customers, entry-level models could be very interesting. Like the Dacia Spring, whose sales increased by 570% in the first half of 2022. It should also be noted that the various aids provided by European states also facilitate access to the electric car.

But the latter was to remain an expensive product, indeed very expensive, for the next ten years.

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